British Steel buyer set for £120m government support package
The Chinese takeover of failed manufacturer British Steel has been bolstered by reports the government is in the process of finalising a £120m package to help protect jobs in the area.
Business secretary Andrea Leadsom and minister Nadhim Zahawi met executives from Jingye Group on Wednesday to discuss completing the purchase.
Read more: British Steel deal could fall through as Chinese buyer Jingye falters
Leadsom later tweeted confirming that the meeting had taken place, saying it was “highly productive and I remain optimistic about progress.”
Sky News first reported the size of the package, which a source close to Jingye confirmed was in the right ballpark.
The Regional Growth Fund, which would safeguard thousands of jobs in newly Conservative constituencies in the area, was at the top of the agenda.
It is expected that the government will confirm it will provide the funding in the next few weeks.
A spokesperson for the Department for Business, Energy and Industrial Strategy (Beis) said: “We are continuing to work with Official Receiver and Jingye on the next stage of the sales process.
“The Government schemes that are available to all steel producers will be available to them, should they choose to apply to them – but no Government money has currently been committed.”
Scunthorpe, where British Steel is headquartered, was one of a number of seats that returned a Conservative MP for the first time in history last week as Labour’s heartlands turned blue.
The company employees roughly 4,000 people at its steelworks in north Lincolnshire, as well as at other sites in the north.
Jingye’s takeover of British Steel, which is worth around £50m, has reportedly been in jeopardy in recent weeks, with the government lining up alternative buyers as a precaution.
The Chinese firm has dismissed such reports as “completely incorrect.”
However, the firm was thrown off guard at the beginning of December when it was reported that British Steel’s French factory was up for sale in an independent process.
The site at Hayange in northern France, which makes rail for national train firm SNCF, is a strategic asset for the French government, meaning it can grant or withhold approval for any change of ownership.
Read more: British Steel’s French site up for sale separately to Jingye deal
The government has kept British Steel’s running since May at a cost of half-a-billion pounds to the taxpayer.
The Chinese company, which swooped in after an initial deal with Turkish firm Ataer Holdings fell through, said it would invest £1.2bn in British Steel over the next decade.
City PM has contacted Jingye for comment.